Saturday Snippets

The study of economics is a worthwhile pursuit, though the average economist tends to assume too much. They work with models for a living, see, and have to estimate and predict conditions and all sorts of stuff.

Have you heard the one about an economist stuck on a desert island with nothing but tinned food to survive on? He starved to death whilst assuming a can opener.

And so it goes that The Economist magazine has an article entitle Ethanol Schmethanol, which in true form manages to criticise ethanol in favour of several other fuel technologies that don’t exist as yet. Maybe they will in the future. Maybe. But i won’t be holding my breath in anticipation of filling up with Octanol any time soon.

Once again, ethanol isn’t the answer. It’s part of the answer and it’s a part that’s here now.

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Residents of Stoney Creek, Ontario, shouldn’t hold their breath waiting for the new Saab that looks like this, either.

UrSaab-X

Rumours of a new UrSaab-X are greatly exaggerated……

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From now on, this blog will be running on a user pays basis and I’ll go on strike unless you agree. You’ll also pay me when there’s no stories to be written, because this site that you enjoy and come back and visit was built on the back of my hard work and so therefore I deserve payment even if I’m doing nothing.

What’s more, for the privelege of having these conditions under which I’ll blog in the future imposed upon you, you now have to pay me a $3000 signing bonus – each of you.

Yes folks, I’m joining the UAW.

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BusinessWeek:

GM may be ridding itself of its healthcare cost legacy. But they are still stuck with their brand and dealer legacies, which spread limited resources too thin. Buick is a dead brand. Saab is hopeless.

Trollhattan Saab:

BusinessWeek Sucks Ass.

See, anyone can have an opinion.

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It’s Grand Final day here in the football loving states of Australia. A holy day on any sport lover’s calendar. I have a mate who works in the radio room for Tasmania Police. He’s the guy you get when you call 000 in case of an emergency (you Americans can think ‘911’).

The worst days of the year to work in the radio room are New Year’s Eve, and Grand Final day.

The two teams that are playing in the Grand Final are Geelong and Port Power (from Port Adelaide in South Australia). Everyone in the country, with the exception of Port Power supporters, will be cheering for Geelong. There’s so much history in this team that I wouldn’t dare to start boring you with it.

Just believe me, if Geelong win today it’ll be a great day for footy. And they will.

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22 Comments

  1. BusinessWeek = Idiots.

    I won’t even comment on the inane SAAB remark. And Buick is a dead brand? I’m no Buick fan, but the new Enclave is not a bad looking vehicle. Really, quite the opposite. Sales are strong. I see quite a few in my area.

  2. Swade – If you are interested in Canada, then you should know that the puck drops for the first game of the National Hockey League season in about 12 hours – LA vs the Ducks in London? (that’s 9AM where the teams actually live)

    I wouldn’t read too much into that Economist article – they just seem to be shilling for that pharmaceuticals company which is probably trying to drum up some venture capital. When you click the link for “get article background” it explains what biotech is – nothng about fuel or CO2.

  3. Swade,
    You just made me laugh out loud 3 different times in 1 posting!

    My wife was asleep and threw a shoe at me for causing racket.

    Hehe, still laughing… under my breath.

  4. The BusinessWeek piece seems poorly researched. Buick sold 240,000 vehicles in the States in 2006, down from 280,000 in 2005 (and 430,000 in 2002 — eek!). Though, this can be partly explained by the restructuring of their range. In 2004 they had four sedans (Century, Regal, LeSabre and Park Avenue); in 2006 they had two (the LaCrosse and Lucerne). The article also fails to note that Buick sold close to 300,000 cars in China in 2006. Buicks are impossibly boring and entirely unremarkable, but the brand is far from dead.

    The Economist, however, is right — ethanol is a joke. Ethanol is only “here now” because of healthy subsidies and poorly-informed pseudo-environmentalism from champagne socialists. It’s shortcomings are well-documented, both from the economic and environmental perspectives.

    Saab is wise to push BioPower only so long as governments insist on supporting the stopgap “solution” that is ethanol. Just imagine where 9-5 sales in Europe would be without it.

  5. Maybe the talk about how the the brands do on the US market, not on the global market. If I were GM, I would really think about what’s wrong with Buick. From 430,000 in 2002 to 240,000 in 2006, and if they countinue the trend from the first 8 months this year they end up with something like 180,000 for 2007. Down almost 60% in 5 years. Maybe the should just take the brand outside behind the stable and shoot it.

    About ethanol being a joke or not… I think that 25 years from today, most people will think of petrol and diesel as the biggest joke of them all. It’s easy to sit around and complain about everything that’s new just beacause it’s not “perfect”. That is usually a effective way to be left behind. The American auto industry is an good example of that.

  6. Yonah: “The Economist, however, is right — ethanol is a joke. Ethanol is only “here now” because of healthy subsidies and poorly-informed pseudo-environmentalism from champagne socialists. It’s shortcomings are well-documented, both from the economic and environmental perspectives.”

    No, The Economist (which BTW, if you didn’t already know, is a bastion of biased, far right-wing sentiment) is not right. Though not “the solution”, Ethanol is far better than gasoline for the environment and is a decent stop-gap measure, even in its starch (corn-based) form. To discount it in favor of other technologies which aren’t here is just silly. I wonder how much ExxonMobil stock the author owns.

  7. Not sure ethanol is even “an” answer. At present it is barely a break-even manufacturing proposition. It requires dedicated pumps, tanks, and tankers requiring an “empty” return trip cost, is not able to pipeline, has temperature, driveability, corrosion problems, a 25% mileage penalty, has forced corn and corn-products prices up… What were its good attributes again?
    Other than the 3.5% in my Guinness, not much.
    Biodiesel has none of those negatives.

  8. fred: the overall environmental effects of ethanol are favorable over gasoline. Maybe not all that much, but it’s better than nothing.

    Sure, I’d rather see bio-butanol than ethanol, but there are powerful forces behind ethanol as opposed to butanol. You don’t need a specially-modified vehicle to run butanol like you do for ethanol, so SAAB wouldn’t have that much of an advantage over any other manufacturer. Or maybe they would. The fact that SAAB is the only manufacturer whose cars actually perform better on ethanol might bridge over to butanol, what with the higher octane level than gasoline and turbocharging. And you can send butanol through pipelines, unlike ethanol.

    Fred, biodiesel has more problems. I’ve read all kinds of stories about how biodiesel has messed-up fuel systems at sites like Autobloggreen, who are very pro-biodiesel. The fuel has a long way to go. Not a single manufacturer approves B100 in their diesel vehicles, I don’t think, do they? I read Peugeot certifies up to B30 in their cars, but that still leaves 70% petro-diesel.

    If the U.S. were to drop the tariffs on imported ethanol, we’d suddenly have cheap ethanol available which was created from sugarcane (a lot more efficient), which would be even better, but the agribusiness lobby won’t let that happen.

  9. There is nothing especially “right wing” about The Economist. Whatever biases they may or may not have does nothing to change the truth at the heart of the article — that developing ethanol is waste of time and money.

    The rhetoric here favors ethanol; the evidence does not. That ethanol is not all that great for the environment has been thoroughly documented. Production is not energy efficient, carbon dioxide emissions are comparable to gasoline, reduced fuel efficiency, petrol consumption is redistributed to other countries (the National Bureau of Economic Research published a paper earlier this month on this phenomenon and other unintended effects of Pigovian policies), etc. Subsidizing crops like corn have huge economic effects. America’s Farm Bill (which heavily subsidizes corn and soy) has destroyed the agricultural sectors in South America and Africa. Widespread adoption of ethanol could be a disaster.

    It’s naive to assume that the Economist is a lackey for Big Oil, but fail to address the powerful business interests (Monsanto, ADM, et al) pushing for ethanol. If private businesses wish to pursue ethanol, let them. But I object to governments wasting tens of billions of taxpayer dollars to prop up technology that cannot sustain itself.

    There is a lot of promising research going on offering the hope of a real replacement for fossil fuels. Researchers recently (accidentally!) figured out to burn salt water as a fuel. Hydrogen is progressing. These are a few years off, but until then striving for greater efficiency and economy from petrol and diesel will suffice. Saab’s SVC from a few years ago was a promising. Mercedes-Benz’s recently unveiled DiesOtto (238 bhp, 295 torques, 39.2 mpg from 1.8 liter four cylinder) looks amazing. Even designing a car with a low drag coefficient (something with Saab excels at) has a significant effect on fuel consumption.

    As far as I can tell, ethanol is only a suitable solution for the problem of assuaging Western guilt.

    Fossil fuel dependency is a complex problem and simple solutions (and Saab apologism) need not apply.

  10. Yonas, so far you’ve managed to label me as a champagne socialist, a Saab apologist and a peddler of rhetoric. You’ve mentioned that running E85 has similar emissions to running gasoline, but not the close loop nature of ethanol vs the unlocking of carbon-based emission in that discussion. You’ve mentioned corn (which is a bad source for ethanol) but not the promise of cellulosic ethanol.

    Look, I’m no scientist and I’ve said all along that ethanol is only part of the answer. Yes, Saab are benefiting from it, but the Swedish government and other governments aren’t pursuing it so that Saab can benefit. It just happens that Saab’s turbocharging philosophy can make best use of it.

    The use of cellulosic and better tuning in the future (watch this space) will make a better case for it and I think it will become a better and more legitimate business case in the future. That’s why there’s capital being spent on cellulosic at the moment.

    If you’re right and they can now burn salt water, then I guess all of our global warming problems are solved. When can we expect that?

    Earlier this year, I went to the Australian launch for BioPower (we don’t even sell E85 here) and sat with David Lamb, one of Australia’s top scientists and engineers and listened to him make a case for ethanol, from a scientific point of view, but only if the fuel is made responsibly. Now I’ve seen GM in the US make the simple agri-pleasing ploy of promoting corn as an ethanol source. That’s popularism and it’s a ploy to support ethanol because they get a break with CAFE regulations for using it.

    I’ve never heard Saab make the same came case. Saab’s promotion of ethanol has been geared, responsibly, toward cellulosic. if you can show me a case where Saab have focused on corn as a primary source for ethanol, then I’ll withdraw this comment with a smile.

  11. Swade: I’ll also add to your argument that because Sweden has set a goal of being oil-free by 2020, ethanol is a part of that. Where does Sweden get its ethanol? Is it corn-based? No. They import it from Brazil, where it’s made from more efficient sugarcane. Their neighbor Norway is a huge oil producing country, but Sweden sees a future in shipping ethanol from Brazil, not importing more petroleum from Norway.

  12. From a car manufacturers point of view – E85 as a straight replacement for gasoline is the path of least resistance (putting aside questions about where the Ethanol comes from). No major changes are needed to the engine, emissions control or drivetrain; and the owner can still use normal gas when they can’t find an E85 pump.

    Most of the negatives for E85 come from the supply infrastructure side – E85 isn’t widely available, corn is arguably the least efficient source crop for ethanol, and production capacity is nowhere near the same quantity as the volume of oil imported.

    On a side note – Gripen, I hate to disagree with you, but importing sugar cane ethanol would only be switching dependency from an unstable Middle Eastern cartel to an unstable tropical cartel. Locally produced ethanol will create some new jobs and keep $$ in the community where it is spent.

    I don’t think we’ll see significant reduction in petroleum imports until E-flex hybrid cars are on the market. E85 makes a lot more sense in a car that isn’t burning fuel all the time. Meanwhile, I think Saab is right to proceed with the current BioPower engines in the US to help spur development of solutions to the supply problem.

  13. Trade-offs. I’m coming to believe that in order to secure our planet’s, and therefore our children’s future we’re going to have to accept some sacrifices.

    Maybe whatever fuel supplants petroleum in our automobiles won’t have quite the range of fossil-based fuels.

    People often complain (as in the article in The Economist) that cleaner more sustainable technologies such as bio-ethanol or bio-butanol have 34% (as in the case of ethanol) or 9.5% (as in the case of butanol) worse fuel economy than gasoline. Also, they point-out that electric vehicles have a much more limited range than fossil-fuel cars.

    Well, maybe we’ll have to accept that if it’s what it takes to come to a solution. Personally, I’m willing to accept a car which can only go 150 miles or so before needing to be re-fueled or recharged if it means securing my kids’ future. It’s an acceptable trade-off, IMHO.

    It doesn’t take long to refill that car with ethanol or butanol, or whatever. Maybe for EVs they can come up with a battery standard so that there can be some sort of exchange program at filling stations, where you turn in a mostly-exhausted battery for a fully charged one, much like you do with propane bottles for barbecues at The Home Depot.

    I know, I’m crazy. But I just don’t like the idea of hydrogen (and it’s always “just 15 years away!”). I see a lot of concepts but next to NO new technologies actually on the market, short of hybrids, to help solve our problems.

  14. While we’ve established that BusinessWeek sucks, there’s an interesting article at their website that reports “Big Oil” (the petroleum industry) is fighting E85 adoption.

    It’s interesting that ethanol critics attack the subsidies that ethanol gets, while Big Oil itself is accepting subsidies.

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